Garmin (GRMN 2.53%) reported its fourth-quarter and full-year 2024 earnings on February 19, 2025, delivering exceptional results across all business segments. The navigation and wearables technology company posted record revenue and substantial margin expansion. Here are three things of note from the company's conference call with investors after reporting earnings.
Record Growth and Expanding Margins Across All Segments
Garmin achieved outstanding financial performance in 2024, with every business segment reaching record revenue levels.
We achieved growth in every segment, resulting in record segment revenue and record consolidated revenue. 2024 was also a year of historical significance, marking our 35th year in operation. Since we were founded in 1989, we have delivered more than 300 million navigation and communication devices, including more than 18 million delivered in 2024.
-- Cliff Pemble, President and CEO
The financial results were impressive, with consolidated revenue increasing 20% to $6.3 billion for the full year. Operating income jumped 46% to nearly $1.6 billion, and operating margins expanded to 25%, reflecting both improved gross margins and operating leverage.
NYSE: GRMN
Key Data Points
Product Innovation Driving New Market Opportunities
Garmin's continued investment in product innovation is creating growth opportunities by introducing new product categories and penetrating new markets. The company highlighted two significant new products that showcase this strategy.
We are strategically focused on creating growth opportunities by introducing new product categories and penetrating new markets. During the quarter, we launched two products that are rising to the definition of a halo product because they are changing the game in their respective markets. The first product I want to mention is the Approach R50 which is the only portable golf launch monitor with a built-in simulator. ... We also launched the Descent X50i, our first large-format dive computer.
-- Cliff Pemble
Strong Fitness Segment Growth and New Customer Acquisition
Garmin's fitness segment delivered exceptional performance, gaining market share and emerging as a major growth driver.
2024 was an exciting year as demand for running, cycling, and wellness products has been robust and new customers are embracing the healthy active lifestyles our brand represents. We experienced growth in every product category, led by strong contributions from advanced wearables. For the year, Fitness revenue increased 32% to $1.77 billion. Gross margin was 58%, a 480 basis point improvement over the prior year ... Operating income more than doubled year over year to $483 million and operating margin expanded approximately 1,000 basis points to 27%.
-- Cliff Pemble
The margin expansion in this segment resulted from what Pemble described as "lower product cost and favorable mix." The CEO also directly addressed market share gains, stating, "especially in the wearables area, we're seeing many more new customers coming to Garmin and we're benefiting from market share gains, which is driving our results."
Looking Ahead
Garmin's management expressed confidence in continued growth for 2025, with CEO Pemble stating, "We anticipate 2025 consolidated revenue will increase approximately 8% to $6.8 billion." This outlook is bolstered by a proposed 20% dividend increase to be voted on by shareholders at its upcoming annual meeting.
The company plans to build on its success through continued product innovation. As Pemble noted, "Looking ahead, we have many product launches planned for 2025 that will further strengthen our portfolio with some representing new categories for Garmin."
